EUR/USD V USD/JPY and G10: Levels, Ranges, Targets

In the April 17th post, it was written currency prices were settled especially after last month’s 3 and 600 pip movements then BOE’s Carney April 20 offered price movements but not enough to disrupt the balance to offer significant price moves. USD/CAD and CAD crosses performed well but remained within their respective allowable pip movements.

Overall currency prices remain tight and within 50 and 100 ranges and no assistance from EUR/USD and USD/JPY as both pairs head into week 9 since February 23rd to more range compression. Settled prices and a tight market means the cross pairs as well as USD V non USD in the majors are equally affected but this also means the breakouts are not only on the way but price breaks must be seen.

A settled currency price is representative of a one moment in time concept but its impossible to settle Statistics therefore its a matter of time before volatility hits hard again and it should hit violently. The only unknown question is where will it come from, an interest rate rise or fall, misaligned economic announcement, a central bank statement, Trump.

Regards to EUR/USD, Nowotny and ECB speakers is the habit to mention central bank policy when the EUR/USD price is stuck. It was the same situation during the days of Jean Claude Trichet. The non credibility to Nowotny statements is European interest remain completely dead even as the Fed raised, , Euro interest rates failed to move.

Despite the 9 week range restriction to EUR/USD and USD/JPY , the overall effects reverberated only to EUR/USD and USD/JPY and not cross pairs as range restriction over 9 weeks informed the EUR/USD and USD/JPY trade strategy resorted to elimination of long term consideration to favor quick day trades. What informed USD/JPY and EUR/USD matters not one iota to overall currency markets is the past 35 trades and pip gains. Restriction meant look at other currency pairs.

Last week’s EUR/USD and USD/JPY as mentioned contained their best opportunity in 9 weeks to see upper and lower break points but the best offered was trade to the brink of 1.2253 and 108.04.

EUR/USD’s break point this week is now 1.2253 and a slow painful rise since March 10’s 1.2196. A higher EUR/USD to target 1.2395 must break 1.2294, 1.2324, 1.2329 and 1 .2361. Caution at 1.2361. Note 1.2395 as 1.2400’s were eliminated from break point consideration which means above 1.2395 then next points come at 1.2501 and 1.2534.

Below 1.2253 targets 1.2160, 1.2152, 1.2082 and 1.2021. EUR/USD remains overbought from 1.1200, 1.1300 and 1.1500’s and explains EUR/USD non ability to travel exorbitantly higher but also the 10 year average now drops from 1.2800 consideration to 1.2787. We’re cautiously looking at a higher EUR this week only because its deeply oversold from 1.2253, 1.1800 and 1.1700’s. But note 1.2282 close to 1.2395 is 79 pips and nothing special overall.

USD/JPY break points above are located at vital 108.04 then 108.17 and on a break comes 108.93. Below 107.32 and 107.08 then the many and massive supports in the 106.00’s begin at 106.62, 106.59 and travel to 106.14. As USD/JPY prices remain at war against each other, USD/JPY fails in trade consideration.

Currency pair agenda for trade consideration this week is cautious GBP/USD long but careful at 1.4054. GBP/USD in the 1.3900’s are many and massive from 1.3973, 1.3953 and 1.3919. Continuation of longs target 1.4224.

AUD/USD and AUD/JPY are deeply oversold. Short again EUR/AUD on price rises. An explosion is coming to EUR/NZD. Only short points remaining for EUR/GBP are 0.8811, 0.8775 and 0.8769 to target 0.8500’s.

EUR/CAD and GBP/CAD remains short on price rises. Overbought USD/CAD shorts are located at 1.2674 to resume the downtrend.

Brian Twomey

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